Bill Text: IL SB0375 | 2021-2022 | 102nd General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Authorizes the Illinois Insurance Guaranty Fund, at the direction of its board of directors and subject to the approval of the Director of Insurance, to form and own a not-for-profit corporation to which the Fund may delegate certain of its powers and duties provided by the Code. Allows the not-for-profit corporation to contract to provide services to the Office of Special Deputy Receiver or any other person or organization authorized by law to carry out the duties of the Director in the capacity of receiver under specified provisions of the Code, the Illinois Life and Health Insurance Guaranty Association, an organizations in another state similar to the Illinois Insurance Guaranty Fund or the Illinois Life and Health Insurance Guaranty Association. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2021-05-19 - Added as Co-Sponsor Sen. Terri Bryant [SB0375 Detail]

Download: Illinois-2021-SB0375-Introduced.html

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102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 SB0375 Introduced 2/19/2021, by Sen. Napoleon Harris, III SYNOPSIS AS INTRODUCED:
215 ILCS 5/532 from Ch. 73, par. 1065.82
215 ILCS 5/537.9 from Ch. 73, par. 1065.87-9
215 ILCS 5/538 from Ch. 73, par. 1065.88
215 ILCS 5/538.2 from Ch. 73, par. 1065.88-2
215 ILCS 5/538.7 from Ch. 73, par. 1065.88-7
215 ILCS 5/538.10 new
Amends the Illinois Insurance Code. Authorizes the Illinois Insurance Guaranty Fund, at the direction of its board of directors and subject to the approval of the Director of Insurance, to form and own a not-for-profit corporation to which the Fund may delegate certain of its powers and duties provided by the Code. Allows the not-for-profit corporation to contract to provide services to the Office of Special Deputy Receiver or any other person or organization authorized by law to carry out the duties of the Director in the capacity of receiver under specified provisions of the Code, the Illinois Life and Health Insurance Guaranty Association, an organizations in another state similar to the Illinois Insurance Guaranty Fund or the Illinois Life and Health Insurance Guaranty Association. Effective immediately.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
changing Sections 532, 537.9, 538, 538.2, and 538.7 and by
adding Section 538.10 as follows:
(215 ILCS 5/532) (from Ch. 73, par. 1065.82)
Sec. 532. Purpose. The purpose of this Article is to
provide a mechanism for the payment of covered claims under
certain insurance policies and the expenses of the Fund in
handling covered claims and to participate in and facilitate
the process by which the assets of an insolvent company are
marshaled and distributed pursuant to Article XIII of this
Code or similar provisions in other states and jurisdictions
to, among other things, reimburse the cost of covered claims,
to avoid excessive delay in payment of covered claims, to
avoid financial loss to claimants or policyholders because of
the entry of an Order of Liquidation against an insolvent
company, and to provide a Fund to assess among member
companies the costs cost of such protection and maintain the
continuity and self-sufficient operation of the Fund, and to
offset the costs associated with maintaining the Fund's
continuity and self-sufficient operations when practical by

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providing assistance and services to the Director in her or
his capacity as receiver under Article XIII of this Code and
other State guaranty organizations in the performance of their
respective statutory and legal functions provided by law among
member companies.
(Source: P.A. 85-576.)
(215 ILCS 5/537.9) (from Ch. 73, par. 1065.87-9)
Sec. 537.9. The Fund shall handle claims through its
employees or through one or more companies or other persons
employed as servicing facilities, including a corporation
formed pursuant to Section 538.10.
(Source: P.A. 85-576.)
(215 ILCS 5/538) (from Ch. 73, par. 1065.88)
Sec. 538. Powers of the Fund. The Fund shall have the
powers enumerated in the Sections following this Section and
preceding Section 539 538.1 through 538.8.
(Source: P.A. 77-305.)
(215 ILCS 5/538.2) (from Ch. 73, par. 1065.88-2)
Sec. 538.2. The Fund may employ or retain such persons as
are necessary to handle claims and perform other duties of the
Fund or may delegate such functions to a corporation formed
pursuant to Section 538.10.
(Source: P.A. 77-305.)

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(215 ILCS 5/538.7) (from Ch. 73, par. 1065.88-7)
Sec. 538.7. (a) The Fund may perform such other acts as are
necessary or proper to effectuate the purposes of this
Article.
(b) The Fund may contract with the Office of Special
Deputy Receiver or any other person or organizations
authorized by law to carry out the duties of the Director in
her or his capacity as a receiver under Article XIII of this
Code, the Illinois Life and Health Insurance Guaranty
Association under Article XXXIII 1/2 of this Code, and
organizations in another state similar to the Fund or the
Illinois Life and Health Insurance Guaranty Association. The
power of the Fund to contract with these persons or entities
includes, but is not limited to, providing consulting services
and claims administration services that assist with these
persons or entities in the performance of their respective
statutory and legal functions provided by law. The Fund may
only exercise the authority to contract pursuant to this
subsection upon the board of director's written determination
that the provisioning of such services will advance the
purposes set forth in Section 532. Any contract with
organizations in another state similar to the Fund or the
Illinois Life and Health Insurance Guaranty Association shall
be subject to the prior approval of the Director. Any contract
the Fund may enter into to provide services pursuant to this

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subsection shall be subordinate and subject to the Fund's
statutory obligations to timely pay covered claims and avoid
financial loss to claimants or policyholders described in this
Article.
(Source: P.A. 82-210.)
(215 ILCS 5/538.10 new)
Sec. 538.10. Formation of a not-for-profit corporation;
delegation of Fund powers. The Fund may, at the direction of
its board of directors and subject to the approval of the
Director, form a not-for-profit corporation under the General
Not For Profit Corporation Act of 1986. The Fund may delegate
in its plan of operation any or all powers and duties of the
Fund, except those provided by Sections 537.6 and 538.3. The
not-for-profit corporation may contract to provide services to
any or all of the following types of organizations: (a) the
Office of Special Deputy Receiver or any other person or
organization authorized by law to carry out the duties of the
Director in the capacity as a receiver under Article XIII of
this Code; (b) the Illinois Life and Health Insurance Guaranty
Association under Article XXXIII 1/2 of this Code; and (c)
organizations in another state similar to the Fund or the
Illinois Life and Health Insurance Guaranty Association. The
not-for-profit corporation is authorized to contract pursuant
to this Section upon the board of directors' written
determination that the provisioning of such services will

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advance the purpose set forth in Section 532. Any contract
with a organization in another state similar to the Fund or the
Illinois Life and Health Insurance Guaranty Association shall
be subject to the prior approval of the Director. Any contract
the not-for-profit corporation may enter into to provide
services pursuant to this Section shall be subordinate and
subject to the Fund's statutory obligations to timely pay
covered claims and avoid financial loss to claimants or
policyholders described in this Article.
Section 99. Effective date. This Act takes effect upon
becoming law.